Who is a member?
Our members are the local governments of Massachusetts and their elected and appointed leadership.
His Excellency Deval Patrick
Governor of the Commonwealth
State House, Boston
Dear Governor Patrick,
On behalf of the cities and town of the Commonwealth, the Massachusetts Municipal Association is writing to support key municipal and school aid programs for funding in the fiscal 2015 state budget recommendation that you will file in January.
A strong and enduring partnership between cities and towns and state government is essential to a healthy and expanding economy and to the ability of local government to provide world-class education and municipal services, ensure safe streets and neighborhoods, and maintain local roads and vital infrastructure. This is fundamental to our state’s economic success and competitiveness.
The Great Recession of 2008-2009 and its lasting impact have challenged this vital state-local fiscal relationship. Cities and towns will continue to face enormous fiscal challenges unless the Commonwealth embraces a revenue sharing approach to reinvest in local aid. Despite a tightly capped property tax due to Proposition 2½, municipalities are more reliant on the property tax to fund essential services than at any time in the past 30 years. Adequate funding for municipal and education aid is necessary in order for cities and towns to provide the basic local and school services that the residents of Massachusetts deserve and expect, and to mitigate today’s overreliance on the most regressive of the major revenue sources in the state, the property tax.
Municipal Aid to Fund Essential Local Services
Unrestricted General Government Aid
We strongly support an increase in the Cherry Sheet Unrestricted General Government Aid (UGGA) account of at least the same percentage that state tax collections for fiscal 2015 are forecast to grow through the state “consensus” revenue process, including distribution of the full municipal share of Lottery revenue.
Municipal aid was cut deeply during the recession and this year remains nearly $400 million below the fiscal 2008 level of funding. The UGGA account is currently funded at $920 million, and DOR Commissioner Amy Pitter has indicated that state tax revenue growth will be between 4.3 percent and 5.2 percent. Using that same range, we ask that UGGA be increased by $39.6 million to $47.8 million, depending on the final consensus growth rate established for the fiscal 2015 budget.
This modest increase would simply mean that unrestricted aid would track the growth in the state’s revenue capacity, and would provide cities and towns with much-needed funds to deliver vital services that are critical to our overall economic growth, and would ensure that today’s municipal overreliance on the property tax will not deepen.
We strongly oppose any attempt by the state to earmark or establish state-set conditions for the receipt or use of unrestricted municipal aid. Cities and towns have a very open and participatory process through which local citizens and their elected leaders allocate revenues and set spending and policy priorities. Earmarking or condition-setting measures are blunt, ineffective and inefficient instruments that interfere with local decision-making. One-size-fits-all policy prescriptions inevitably do not fit and cause significant disruption, given the diversity of the Commonwealth’s 351 cities and towns. Further, no city or town could responsibly use conditioned or restricted local aid to fund recurring or ongoing services, as there would be no guarantee that these funds would be available in future years, thus such a policy would actually compromise the local budget process and destabilize municipal operations.
Payments in Lieu of Taxes
We support full funding of the Commonwealth’s obligations and commitments to the program for payments in lieu of taxes for state-owned land (PILOT). This is a particularly important program for cities and towns that host and provide municipal services to state facilities that are exempt from the local property tax. This account is funded at $26.77 million, and is still below the $28.3 million funding level provided in fiscal 2008.
Shannon Anti-Gang Grant Program
We support continued funding for the Shannon anti-gang grant program that has helped cities and towns respond to and suppress gang-related activities. The program receives $7 million now, an increase of $750,000 compared to fiscal 2013.
Community Innovation Challenge Grant Program
We support funding for the Community Innovation Challenge Grant Program that was developed by your Administration to provide resources and incentives for cities and towns to undertake regional and collaborative approaches to municipal and school services as a way to improve service delivery and save money. We urge you to continue your advocacy and funding of this innovative and popular program.
Chapter 40S Payments
We support full funding of the Commonwealth’s commitment to make payments to cities and towns that approve “smart growth” zoning districts under Chapter 40R and are due payments under Chapter 40S as smart growth school cost reimbursements. This program is an integral part of joint state-local efforts to encourage the development of affordable housing. This small program receives $500,000 now.
School Aid to Fund Essential Education Programs
Chapter 70 School Aid
We strongly support a sufficient funding increase for Chapter 70 school aid to ensure that all municipal and regional school districts are able to reach the “foundation” level of spending, to aggressively implement the target share equity provisions adopted in 2006, and to provide an adequate amount of minimum aid that ensures that all schools receive an increase in fiscal 2015, which we believe should be at least $100 per student. A significant majority of school districts only receive minimum aid, which is why the minimum aid aspect of Chapter 70 is so important.
We also request the addition of language in the budget recommendation that would allow all school districts to count spending on health insurance for retired district employees toward the “net school spending” requirement under Chapter 70. The current rule that excludes these costs in some districts and allows these costs in others is not part of Chapter 70, but has routinely been included as temporary language in Section 3 of the budget to the detriment of many cities and towns. The Department of Elementary and Secondary Education (DESE) has drafted transitional language that would address this problem and end this inequity.
Special Education “Circuit Breaker”
We support full funding of the Special Education “Circuit Breaker” Program through which the state provides a measure of support for services provided to high-cost special education students. Under Section 5A of Chapter 71B of the General Laws, the state’s share is 75 percent of costs that exceed four times the state average per pupil foundation budget.
The MMA and municipal and school officials appreciate that the $252.5 million appropriation for fiscal 2014 is currently estimated to be adequate to meet the state’s full statutory obligation, and we ask that full funding be maintained next year, which would require a modest increase. This is an essential program that provides critical funding to assist all school districts with the increasingly burdensome cost of complex and expensive special education services.
Student Transportation Reimbursements
We support and respectfully request that you include funding in House 2 to assist cities, towns and school districts with the cost of transporting schoolchildren. There are four aspects to this important budget priority: 1) reimbursements to regional districts; 2) the transportation of homeless students under the McKinney-Vento program; 3) transporting out-of-district vocational students; and 4) renewed reimbursements to regular (non-regional) school districts. A brief summary of each of these transportation funding issues follows below.
1) We urge you to increase funding for transportation reimbursements to regional school districts. Funding for this account is vital to regional districts and member cities and towns, particular in sparsely populated parts of the state. The current $51.5 million appropriation is appreciated, yet is still far below full funding. Decades ago, the state promised 100 percent reimbursement as an incentive for towns and cities to regionalize, and the underfunding of this account has presented serious budget challenges for these districts, taking valuable dollars from the classroom.
2) In fiscal 2013, the state budget provided $11.3 million to fully fund the state-mandated costs that resulted from the Commonwealth’s adoption of the federal McKinney-Vento Act. The State Auditor ruled that the McKinney-Vento program was an unfunded mandate on cities and towns, and we appreciate the action you and the Legislature took to provide full funding soon after that ruling. Under the program, communities are providing very costly transportation services to bus homeless students to schools outside of the local school district. However, the fiscal 2014 state budget reduced McKinney-Vento reimbursements to $7.35 million, underfunding this state mandate. Local officials urgently request full funding for fiscal 2015, as well as a supplemental appropriation to meet the state’s obligation for fiscal 2014.
3) The fiscal 2014 state budget included a $3 million item to reimburse communities for the cost of transporting students to out-of-district placements in vocational schools. This account recognizes the significant expense of providing transportation services for out-of-district placements, as these students must travel long distances to participate in vocational programs that are not offered locally. We ask that you maintain and fully fund this reimbursement account.
4) Finally, we support a renewed reimbursement program for non-regional school districts to help fund a portion of the burden of student transportation costs. The program was removed from the state budget during a time of economic distress. Restoring funding would benefit school districts in every corner of the state, and would provide important relief that would allow communities to use more of their Chapter 70 aid and local property tax dollars in the classroom.
Reimbursements for School Aid Losses Related to Charter Schools
The diversion of Chapter 70 school aid away from public schools to pay tuition to charter schools has imposed a major and growing financial burden on cities and towns, a problem made more acute as the state grants more charters and existing charter schools expand. Local officials strongly support full funding of the Commonwealth’s commitment under Section 89 of Chapter 71 of the General Laws to reimburse school districts for the loss of a portion of their Chapter 70 aid that is redirected to fund charter schools.
For fiscal 2014, it is expected that cities and towns will be forced to divert more than $400 million to fund charter schools, an increase of more than $50 million over the prior year level. This illustrates the importance of this issue to local governments, and is why it is critical for the state to meet its commitment to this program. Currently, the $75 million appropriation in fiscal 2014 is $28 million below the full funding amount required in the statutory formula, which was signed into law only a few years ago. We deeply appreciate your leadership last year to win an $8 million supplemental appropriation to fully fund the program in fiscal 2013. We ask that you take similar action to close this year’s gap and appropriate the full amount to meet the state’s obligation in fiscal 2015.
A Local Aid Resolution to Facilitate Timely Budget Decisions at the Local Level
Cities, towns and regional school districts need timely notice of the main municipal and school aid accounts in order to prepare and approve forward-looking local revenue and spending plans. We ask that you and your Secretary for Administration and Finance reach out to legislative leaders to secure an agreement on our requested Unrestricted General Government Aid (UGGA) amount for next year, and also agree on a methodology for calculating Chapter 70 local contribution and school aid levels. An agreement in January would set the stage for a consensus Local Aid Resolution and a commitment to minimum municipal and school aid amounts by March 1. This would avoid the very difficult budget challenges that occurred last year for regional school districts and member cities and towns when required local contributions were not finalized until mid-July.
Summary
This is a critical time for our economy, and for cities, towns and local taxpayers. We respectfully ask that you adopt the local aid investments and targeted funding detailed above. Massachusetts is on the verge of a comeback. But that comeback will only happen if cities and towns have the resources to adequately serve the residents and businesses of the Commonwealth.
Please do not hesitate to contact us at any time if you have any questions or need additional information. Your office can contact me or John Robertson, the MMA’s Legislative Director, at (617) 426-7272 ext. 122 or jrobertson@mma.org at any time.
Thank you very much for your support, dedication and commitment to the cities and towns of Massachusetts.
Sincerely,
Geoffrey C. Beckwith
Executive Director, MMA
cc: Secretary Glen Shor, Executive Office for Administration and Finance
Pamela Kocher, Director of Local Policy, Executive Office for Administration and Finance